Charge signals job losses at Ashford University

San Diego’s Bridgepoint Education will take a $6.2 million severance charge for workers in its Ashford University unit who accepted a recent buyout offer.

The company disclosed the charge in a filing with the U.S. Securities and Exchange Commission this week. The size of the severance signals that hundreds of workers likely left Bridgepoint’s Ashford University.

On June 12, the for-profit education company offered voluntary buyouts to non-faculty Ashford University staff in hopes of cutting headcount because of declining enrollment.

The company said workers in San Diego, Colorado and Iowa were eligible. Employees who accepted the offer would receive three months of severance, said a company spokeswoman.

Bridgepoint declined to say how many Ashford workers accepted the offer. But assuming an average wage of $5,000 a month, or $60,000 a year, then more than 400 employees could have taken the buyout based on the size of the severance charge.

Spokeswoman Marianne Perez said the company had no comment.

At year end, Bridgepoint employed 3,900 non-faculty staff. The company also laid off 47 workers last week at its San Diego corporate headquarters. They’ll receive no severance, but they are being paid through Aug. 19.

At the end of the first quarter, enrollment at Ashford University and the University of the Rockies – the two colleges that Bridgepoint owns – was 78,782, down from 94,863 a year earlier.

The company has been rocked by an accreditation crisis since last summer when the Western Association of Schools and Colleges denied Ashford University’s request for accreditation in California.

The university reapplied and expects to learn early next month whether it will achieve WASC accreditation.

In the meantime, Ashford University remains accredited with the Higher Learning Commission – which provides accreditation for colleges in the Midwest. Ashford is located in Clinton, Iowa – though a vast majority of its students take classes online.

Trace Urdan, an analyst with Wells Fargo Securities, said some of Ashford’s enrollment drop-off stems from its efforts to win WASC accreditation. In September, Ashford let go 450 student recruiters and reassigned 400 others to address criticism that it spends too much attracting students and not enough on education and retention, leading to high dropout rates.

But other for-profit colleges also are having a harder time luring new students. Bridgepoint competitor Apollo Group – which runs the University of Phoenix – has seen new enrollments decline for six straight quarters.